MARKET COMMENTARY

We witnessed another day of rally. The Dow had the best show of two days of gain. It may stall on Friday, however. Or, it may have a volatile session. One thing for sure is the high possibility that market players are taking profit at this time for fear that the market will resume its bearish trend from the rebound.

At this time, the oil price plays an influential role in the market rally. Three consecutive drop in the oil price to below $130 per barrel helps boost the markets. The market indexes and the oil price are in complete reverse relationship. For this reason, it helps to watch the oil price as well.

The Dow chart shows that it has surged pass the first resistance. So, the bullish momentum may be diminished. This is why I said it could be stalled on Friday. Due to the strong rally, I expect the rebound to complete soon enough. If it should move higher, I guess it will only deliver that performance by Monday when the Stochastics climbs above the overbought line. After which, it would face tremendous selling pressure again.

Well, that is my personal view. We shall now wait for the market to evolve from there and we react accordingly. Fishes are definitely come to shore now. Get ready to drop the lines.

DJIA Daily Chart

The S&P had performed well, too. It has shown to be much sluggish than the Dow. I guess it may not make it above the 20-days moving average (green line) before the reversal hits. Watch the 1280 resistance line.

SPX Daily Chart

NDX shows a different chart than the Dow and the S&P. There is possibility that it will reverse much faster than two cousins. A Doji has formed on Thursday. If it turns bearish today, we may see an evening star to appear. Friday can become interesting.

NDX Daily Chart

STOCKS TO WATCH:

GS, JPM - bearish reversal.

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